Situation: The CEO of a company is finding it increasingly difficult to maintain the passion that she had when the business was young. Day to day work feels like having a monkey on her back with too much time spent on sales and business minutiae. Too little time is spent on strategy and growth. How do you maintain the passion for your business?
Advice from the CEOs:
Look at what you like and don’t like – delegate what you don’t like.
Delegate activities which are inappropriate for a top executive – like answering the telephone when others are present to do this.
Get everybody in the same boat – get them rowing in unison.
Delegate more responsibility – with the understanding that others will make mistakes. When they do, they must understand their responsibility for repairing them.
Prioritize tasks as they are delegated to reduce conflict or confusion.
Strengthen relationships with key suppliers and customers. This is a strategic move to reduce future risk to the company.
How did you get the monkey off your back?
Ask managers and employees for their input – have them develop solutions. If they push back that they don’t know how or don’t have the resources, let them know that their job is to provide solutions, not just to identify problems.
This takes time and patience, but if the CEO is steadfast this can yield results in a surprisingly short period of time.
Reduce time spent on sales. Become the closer – the only person who can do that little something to close a sale.
Have the others do the heavy lifting our qualifying the customer, developing the solution, crafting the proposal and presenting this to the customer. Limit the CEO’s involvement to reviewing the proposal prior to presentation, and to acting as closer ONLY if sales can’t do the job themselves.
Learn to take time off – develop other interests. This is the first step in being able to take longer periods of time off.
Situation: The CEO of a successful small software company is snowed under by day to day tasks. She wants to focus more of her time on business and infrastructure development. However, the company’s departments are not strong enough to run without her supervision. How do you free up more of your time?
Advice from the CEOs:
The first priority is to develop infrastructure that will allow the CEO to focus on strategic development.
To build this the company needs the right people to do the work.
Look at the daily task list and develop or hire new managers to oversee day-to-day non-strategic functions.
For example, offload payroll and back-end accounting to a bookkeeper.
Look at the gaps between where the company is now and where you, as CEO, want to be in terms of your time and responsibilities:
In addition to a bookkeeper, hire an experienced executive assistant – to keep you focused as CEO.
The company is growing rapidly. It is time to hire a human resources manager.
The company’s cash flow projection for the coming year indicates a substantial surplus.
Use this surplus to hire infrastructure.
In front of key clients, keep the impression that you are available to them; however, this is primarily for client relations. The CEO doesn’t have to do all the work demanded by clients.
Use the lawyer / rainmaker model. The rainmaker maintains key client relationships; however, the rainmaker has staff do 90% of the work.
The 7 States of Enterprise Growth Model indicates that the company is now in what’s called a Wind Tunnel. The critical activities in a Wind Tunnel are:
Letting go of methodologies that no longer work and acquiring new methods that do work, and
A CEO is concerned that her company does not have enough new prospects or
business on the horizon. New business opportunities appear sporadically but not
predictably. She asks how others schedule their time and effort to bring in new
clients. How do you maintain a robust pipeline?
from the CEOs:
Devote a regular amount of time to business and relationship development. Even when business is busy it is important to have the discipline to devote 4 to 6 hours per week to new business development. Schedule this time and fill it with activity. Occasional networking doesn’t work.
What differentiates a company is its brand. If new business comes from referrals, turbo-charge this by becoming the information hub for the referral group. Make it easy for others to make referrals.
There is a hierarchy of things to do.
Stay on potential referrers’ radar screens – monthly or quarterly awareness marketing to referral sources.
Spread awareness of best practices in areas where the company has expertise.
Make best practices relevant with situational stories.
Think in terms of a target.
Where do most referrals come from? This is the center of the bull’s eye
2nd Ring – 2nd level of referrals
3rd Ring – 3rd level of referrals
Network more with contacts at the center of the target – they know clients in need of help.
There is a lot of information in the cloud that is relevant to the business – personnel moves, hiring, firing, etc. If you it is possible to track this, it can help.
LinkedIn can help. Look for 1st and 2nd degree links to individuals of interest. For example, you want to meet a CEO who on LinkedIn is a 2nd degree link. Request a warm introduction from a 1st degree link between you and the CEO.
Think of LinkedIn in terms of rifle shots, not a shotgun approach. This makes it both more manageable and more valuable.
A CEO struggles to balance time and responsibility commitments to his business
with demands of his family. This is not an uncommon struggle for executives.
The question is: what strategies are effective to address the needs of both.
How do you balance the demands of work and family?
from the CEOs:
Member: It takes a plan to find a solution.
what you want and write a business plan to get there.
relationship do you want with your soul mate? Make this part of the plan.
a conversation and test whether your and your spouse’s long-term visions are
take on additional work – this is good both for family relationships and the
role as CEO.
Member: My spouse and I talk about this a lot – particularly around time.
have agreed on how the week is carved out – family time/work time.
agree to honor each other as we are – not how we want the other to be.
work commitments because – long-term – your spouse and children more important
and more lasting than work.
Member: I’ve lived through the same issues.
probably erred on side of family vs. career. The benefit is that now, I can’t
get enough time to play with my kids. It’s great!
to children is very important during the early years. While infants are not as
capable of communicating as they will be later, the basic emotional and
learning patterns – as well as affection patterns – are created early in life.
It’s like the foundation of a building – not much to look at from the street,
but it allows the whole building to stand.
same mind that developed your business can solve this.
open to solutions.
is uncomfortable, but not bad. The struggle proves that you care.
your spouse as somebody who cares enough about herself so that she thinks she deserves
a class act from her mate. Isn’t this what you want in a mate?
Situation: A CEO is
concerned about long term trends versus short term volatility. While the
business has done well over time, short term volatility has made it difficult
to project both personnel needs and cost. As the company expands geographically
these issues are becoming more critical. Which is more important – long or
from the CEOs:
the company find that capabilities are not fully understood until they get into
development? In this case, is the problem with variables of schedule, budget or
capability more important?
forward, evaluate each of these variables to determine which is having the greatest
effect, positive and negative, on project performance and profitability.
the problem is time constraints in the project planning phase, assure that
sufficient time for project iterations is allowed in both the schedule and
budget. It may be that the clients are not sure of what they want until they
see a model, and that several iterations are required to assure that clients’
needs are satisfied. Plan and bid for this.
fixed costs impact margins during dips between active projects, assure that enough
fixed cost coverage is built into project bids to cover dips.
geographically remote offices is the company’s issue a question of volume or
resource cost or is it a pricing issue?
it’s a pricing issue to stay market competitive focus initial activity where
this issue is minimized. As market presence expands, add additional capabilities
in phases according to the ability to cover costs profitably.
it’s a resource cost issue use the same solution, adding resources according
ability to cover costs profitably.
the company’s sales and marketing structure in phases while expanding into new
markets. If sales compensation is base plus commission, vary commissions paid
according to resource rates negotiated. This will tie sales incentives to
negotiated resource rates and will help to assure that costs are covered.
with short term issues effectively will improve long term planning and profitability.
Situation: A CEO and his COO find it difficult to focus on core tasks when business is booming and everyone is busy. The company is small but has been very successful. However, the pressure of simultaneously attending to key customer relationships, training new people, and formulating plans is overwhelming. How do you stay focused when it’s busy?
from the CEOs:
If the CEO and COO are doing a mix of corporate and project tasks, the first step is to delegate so that top staff focus on strategic areas rather than execution.
Over the next week, keep a record of what the CEO and COO are doing. At the end of the week sit down and determine which activities were corporate activities, and which should have been delegated to staff.
As an example, training of new personnel should be a key role of someone else. The CEO and COO will be involved, but only tangentially. The bulk of onboarding should be handled by staff.
Similarly,restrict sales activity of the CEO and COO to high level discussions and decisions.The rest should be handled by sales staff.
What must the CEO and COO be involved in? Intellectual property development, high level decisions about new service offerings, high level decisions on business expansion opportunities, and occasional oversight of company operations.
It is important to focus. The first priority should be the company’s principle revenue stream.
The second priority should be new service offerings which are central to efficient delivery of the primary revenue stream.
Meet with top staff and develop a five-year vision. The order of priorities that are developed will determine where to focus.
In the process of developing priorities, ask the following questions:
What do you love and what do you need to love?
Analyze the comparative importance and urgency of each activity of the CEO and COO. Which require top level input, and how much? Which are better delegated to staff?
Situation: A company has been looking at alternatives for expansion but would be willing to stay in their present site if the landlord is willing to lower their rent without requiring more time on the current lease. Another option would be to purchase a building and lease out extra space until they need to expand. The CEO seeks advice on how to move forward. Do you more or negotiate a lower rent?
Advice from the CEOs:
Much has to do with the current real estate market. If the market is slack, there are more options whether the decision is to move or renegotiate the rent with the current landlord. However, if demand for space is high then landlords and sellers have the upper hand. This is a classic demand-supply situation.
Investigate lease buy-out options if the decision is to move. Better yet, if the decision is to move ask the new landlord to pay off the old lease.
For the money required to move an operation of substantial size, why not buy? In this case, the decision is balancing the size of the down payment with the company’s current cash position.
If the decision is to buy, consider creating an LLC to purchase the property and fund the purchase through a Small Business Administration loan.
The Devil’s Advocate Perspective while you make the decision: don’t worry about the least until it runs out. Instead focus on making as much money as possible and prepare for a move closer to the end of the lease. Renegotiating a lease and looking for a building at this time can consume a lot of time.
Situation: A mid-sized company faces challenges financing their growth. Investment of time, energy and resources precedes the reward of future revenue. It can be difficult to balance the cash needs of current operations with new growth opportunities. How do you finance growth?
Advice from the CEOs:
Have you analyzed growth opportunities and evaluated which could increase your cash flow? For example, if you increase manufacturing efficiency, can the savings help to finance growth?
If you produce parts or products for start-ups, can you structure the relationship so that if the start-up become successful and is subsequently purchased by a larger company there is a bonus payoff for the work that you’ve done?
Analyze – by project, not company – the jobs you’ve done that have eventually become large volume opportunities. Try segmenting your analysis based on the source of the original project: jobs for start-ups, mid-sized and large companies. This may provide insight on where to focus future efforts.
Another company performs clinical services for both big pharmaceutical companies and start-ups. To take advantage of the upside from working with start-ups they take payment both in cash and in stock.
One option is to set up a separate Investment LLC – not tied to the operating company but owned by the same people – that takes the stock position and can, at its option, provide limited venture funding to start-ups.
Start-ups are not yet threats to your large customers but are potential future acquisition targets. Because the stock financing is done outside of the operating company, it is more difficult to trace back to the operating company. Further, competing large companies have not tended to see these investments as threatening the way that they would view direct investment by the company in a competitor. At the time of acquisition by the larger company, the member’s ownership position in the start-up is liquidated.
Situation: A tech company competes in a rapidly changing marketplace. The companies they serve constantly evolve their platforms. The company must respond rapidly to assure compatibility with both hardware and software innovations. Users adapt to new platforms at different rates, and the company must address their needs, as well. With so much time spent tending these diverse needs, how do they plan for market evolution?
Advice from the CEOs:
In the market you serve you must constantly reinvent yourselves as technology changes. Some platforms make changes on a 5-year cycle, while mobile platforms are currently on a 6-month cycle. This may force choices as to which platforms to serve. You also may want to focus on platforms where what you bring to the table is most useful.
You have made the strategic choice to tie the future of your company to a few large companies that dominate their markets. It is imperative that you cultivate close relationships with the technology as well as strategic leadership of those companies. This will give you more advanced insight into their plans, and they may even involve you in discussions about how the market evolves. If so, you will have positioned yourself for that evolution. These relationships may also become your exit strategy.
Businesses run on cash, or access to cash. As you cultivate relationships with your key customer companies, look for opportunities to invest in developing markets on a subscription basis which will provide ongoing annuity revenue. Figuring out how to leverage advertising or positioning options into your offering offers an additional revenue stream.
Situation: A company has remote employees who are on a wide variety of schedules. Retaining great employees is a challenge, and with this consistent service due to turn-over. How do they improve the relationships that they have with remote employees? How do you assure consistent reliable service?
Advice from the CEOs:
Guarantee employee income for a period after they lose a client and as you seek another assignment for them. Limit your exposure by setting hurdles – an employee must have served the company for X time to qualify for this benefit.
Create your own “down time” bank. Say you pay an employee $10. Give them $9 and put $1 into a bank so that you can pay them once they lose their current client. The fact that their bank is limited to the amount of these contributions creates an incentive not to draw down the bank.
Offer a paid day off per month of service.
How do you shift your business from commodity to specialty, as a value add business?
What Peace of Mind features could you provide to your clients to create added value and stickiness? For example, can you provide a portal into your system so that clients can access information on the services that you’ve provided, or enhance their ability to communicate with their own clients? What about access to time schedules, account notes, etc.
Look for a solution that will shift the industry.
Look at menu driven packaging and pricing options. Examples include discount pricing for purchase volume commitments or iPads for a significant level of investment.